Merrill Lynch South African Investor-to-Corporate Trip

22 October 2008

Disclaimer

2

Legal Notice / Disclaimer

This presentation is published solely for informational purposes and does not constitute investment, legal, tax or other advice nor is it to be relied upon in making an investment decision. Information contained herein has been taken from sources considered by Merafe Resources to be reliable but no warranty is given that such information is accurate or complete and it should not be relied on as such. Views and opinions expressed in this presentation reflect the judgment of Merafe Resources as of the date of this presentation and are subject to change. Merafe Resources will not be responsible for any liability for lossor damage of any kind which arises, directly or indirectly, and is caused by the use of any of the information provided.

The entire presentation is subject to copyright with all rights reserved. The information contained herein shall not bepublished, rewritten for broadcast or publication or redistributed in any medium without prior written permission from Merafe Resources.

Prospective investors should take appropriate investment advice and inform themselves as to applicable legal requirements, exchange control regulations and taxes in the countries of their citizenship, residence or domicile.

The distribution of the information contained in this presentation in certain countries may be restricted by law and persons who access it are required to inform themselves and to comply with any such restrictions. This information does not constitute an offer or solicitation in any jurisdiction in which such an offer or solicitation is not authorised or to any person towhom it is unlawful to make such an offer or solicitation.

Past performance is not a guarantee of future performance. The price of shares can go down as well as up and may be affected by change in exchange rates, market conditions and risks associated with a mining venture.

Xstrata-Merafe Chrome VentureFormed 1 July 2004

20.5% of

EBITDA

79.5% of

EBITDA

Corporate Structure

Largest ferrochrome producer in the world (±20% market share)

Opportunity to invest directly into Xstrata’s ferrochrome business

3

Share price information

Market capitalisation*

Share price*

1 year high

1 year low

Shares outstanding

*As at 20 October 2008

US$ amounts based on exchange rate of R10.17:$ at 20 October 2008

ZAR

2.7bn

1.09

4.34

0.97

2.45 billion shares

US$

263m

0.11

0.43

0.10

4

Offshore

12%

SA

37%

The IDC

22%

Royal Bafokeng

Resources

29%

Major shareholders – September 2008

5

Shareholder analysis

Merafe’s share price performance relative to

Mining Index

20

40

60

80

100

120

140

160

180

Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08

Rebased to 1

00

Merafe Mining Index

(35%)

(55%)

The collapse of major international financial

insitutions in recent weeks have thrown global markets

into turmoilInterms results:Revenue +123%EBITDA +387%

EPS +525%

6-Aug-08

Q4 European benchmark

ferrochrome price settled at $1.85

per pound

13-Oct-08

Xstrata-Merafe, the world’s largest ferrochrome producer

7

ENRC, Kazakhstan/Russia

14%

China Various, China

17%

Others

15%

Xstrata Merafe PSV

20%

Samancor Chrome, South

Africa

13%

Zimasco, Zimbabwe

2%

Assmang Chrome, South

Africa

3%

Outokumpu, Finland

3%

Hernic Ferrochrome,

South Africa

5%

Ferbasa, Brazil

2%

Chelyabinsk, Russia

2%

Vargön Alloys, Sweden

2%ASA Metals, South Africa

2%

Operations overview

SMELTERS CAPACITY

Wonderkop 520 kt FeCr - 6 furnaces (Conventional)

Rustenburg 440 kt FeCr - 6 furnaces (Conventional)

Boshoek 240 kt FeCr – 2 furnaces (Outokumpu)

Lydenburg 400 kt FeCr - 4 furnaces (Premus)

Lion 360 kt FeCr - 2 furnaces (Premus)

Total

5 production sites

• 1 960 kt in production capacity

• 20 furnaces

• 7 mines

8

Barriers to entry

9

Low barriers to entry, a thing of the past:

• Capital cost of building smelters have gone up over 500%

• Lead time for critical items needed for construction now 3 years

• Power supply - when will power be available for new projects?

• Shortage of available quality ore reserves

• Serious shortage of artisans and skilled labour (until 2010)

• Escalating production costs

Production of Charge/HC ferrochrome

in ‘000 t Material Weight2006 2007 Change 2008 2009

In ‘000 t in % In ‘000 t 08 / 07 09 / 08

Charge

Brazil 141 164 16.3 165 170 0.6 3.0

Finland 243 242 -0.4 240 241 -0.8 0.4

Sweden 88 80 -9.1 86 110 7.5 27.9

South Africa 2,912 3,549 21.9 3,570 3,650 0.6 2.2

Subtotal 3,384 4,035 19.2 4,061 4,171 0.6 2.7

HC FeCr

China 870 1,232 41.6 1,515 1,520 23.0 0.3

India 634 928 46.3 1,100 1,200 18.5 9.1

Kazakhstan (saleable) 873 952 9.0 970 970 1.9 0.0

Russia (saleable) 204 185 -9.3 274 300 48.1 9.5

Sweden 49 44 -10.2 40 60 -9.1 50.0

Zimbabwe 214 201 -5.9 175 175 -12.9 0.0

Iran 17 17 0.0 17 17 0.0 0.0

Vietnam - - - - 120 - -

Subtotal 2,861 3,559 24.4 4,091 4,242 14.9 3.7

Total Material Weight 6,245 7,594 21.6 8,152 8,413 7.3 3.2

Cr Content 3,558 4,298 20.8 4,776 4,955 11.1 3.8

Cr Content in % 57.0 56.6 - 58.6 58.9 - -

Change in %

Data: Heinz H. Pariser – Oct 2008

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Major capacity changes

in ‘000 t Material Weight2006 2007 2008 2009 2010

Projected capacity 7,200 7,200 8,250 8,720 9,355

Expansions

Sweden - - 30 30 20

Finland - - - - 100

IFM (Ramp-up) - 230 30 - -

Tata (Ramp-up) - - 60 90 -

Xstrata, Lion II - - - - -

ASA - - - - -

Samancor - - - - -

Assmang - - - - -

Hernic - - - - -

Kazchrome Effective after 2010 - - - -

India - 410 50 330 300

Vietnam (Jindal) - - - 120 40

China - 410 300 65 35

Total Expansions - 1050 470 635 495

Total Capacity (including new) 7,200 8,250 8,720 9,355 9,850

Production 6,245 7,594 8,152 8,413 9,172

Capacity Utilisation 86.7% 92.0% 93.5% 89.3% 93.1%

Data: Heinz H. Pariser – Oct 2008, Merafe Resources

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China chrome ore imports

in ‘000 t Material Weight % Change

in ‘000 t US$/t in ‘000 t US$/t in ‘000 t US$/t Y-t-D

United States 66 122 0 0 759 0.0

Brazil 99 161 106 194 61 412 -9.1

Turkey 741 172 1,083 274 770 459 -1.1

Albania 83 152 230 252 94 412 -48.2

Kazakhstan 144 157 198 333 166 540 27.2

India 1,340 191 984 346 424 567 -43.1

Vietnam 73 121 104 142 43 230 -37.2

Philippines 85 136 221 152 276 165 88.4

Iran 245 176 245 176 245 176 0.0

Oman 71 136 338 155 585 224 174.4

Pakistan 197 173 295 296 304 460 48.9

Sudan 29 222 15 338 25 451 82.1

Madagascar 43 166 53 362 76 552 142.7

South Africa 868 157 1,964 215 1,818 353 53.0

Australia 224 166 220 221 32 299 -79.4

Others 17 162 92 264 75 280 0.0

Total 4,325 171 6,091 255 4,901 382 19.2

2006 2007 2008 (1-8)

Data: Heinz H. Pariser – Oct 2008

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Latest developments have not changed the fundamentally strong outlook for commodities

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China remains the growth point for the stainless steel and ferrochrome industry

• The International Monetary Fund has recently (Oct 2008) revised its growth forecasts for China from 9.7% in 2008 to 9.3% in 2009

• As such the stainless steel production estimates have beenrevised from 31.5 million tonnes for 2009 to 29.9 million tonnes (source: Heinz Pariser, Oct 2008)

• China still requires 50,000 skyscrapers by 2025 (McKinsey, 2008)

• China set to urbanise about 350 million people by 2025(McKinsey, 2008)

China’s Stainless Steel supply and demand

Stainless Steel Supply & Demand

4,500

5,000

5,500

6,000

6,500

7,000

7,500

8,000

8,500

9,000

2000 2001 2002 2003 2004 2005 2006 2007 2008e 2009 f

in M

ill t

Cru

de

Sta

inle

ss S

tee

l

Demand

Supply

Heinz H. Pariser

9/11

Destocking

Nickel Price

Bubble

Financial

Crisis

14

Development Stainless Steel Product Mix

18% Cr, 0% Ni

8% Ni, 18% Cr

18% Cr, 4% Ni, 7.5% Mn

Data: Heinz Pariser/CRU

15

• Application • Economics • Process

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Data: Heinz Pariser

Demand changes by segment 2007/2009 - Japan

Stainless steel applications

Cold rolled (CR) flat products represent the largest portion of all stainless steel

Application % Share of global CR flats consumption

Construction 14%

Transport 17%

Industrial equipment 25%

Catering & household products 33%

Welded tubes 6%

Other 5%

Total 100%

Data: CRU

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Ferrochrome prices

European benchmark ferrochrome prices

0.750.82 1 1

1.21

1.922.05

1.85

0

0.5

1

1.5

2

2.5

Q1'07 Q2'07 Q3'07 Q4'07 Q1'08 Q2'08 Q3'08 Q4'08

US

$/lb

18

Gearing

19

R’m

Closing balance 30 June 2008 608

Preference shares 75

ABSA (Lion Ferrochrome, Wonderkop & Bokamoso) 350

Xstrata 99

Overdraft 84

Debtors discounting facility 190

Current situation

Preference shares 75

ABSA 350

Xstrata 0

Overdraft 0

Debtors discounting facility 190

Production costs are rising for ferrochrome producers

FeCr producers have been hit hard by surging costs

• Electricity costs have increased

– Eskom has increased tariffs by 27% this year

– Expect further increases of between 20-25% p.a. over the next three years

• Labour costs

– The Venture has seen double digit increases in 2008

• Cost of reductants have increased significantly

– Coke prices have risen to over $550/t (FOB China), but are coming off

– Rising coal prices

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Average power rates in 2008

Country USc/kWh

China 5.1c

India 4.9c

Japan 4.3c

Finland 4.2c

Sweden 3.7c

Russia 3.2c

Brazil 3.2c

Zimbabwe 3.0c

Iran 2.8c

South Africa 2.8c

Kazakhstan 1.8c

Data: CRU Analysis

21

Production costs

$1.20/lb

22

The Venture anticipated the changes in the South African production environment and invested in efficiencies:

2.4

3.5

4.1

4.8

2

2.5

3

3.5

4

4.5

5

Premus Outokumpu Conventional DC Arc

Specific Energy Consumption (MWh/T)

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Xstrata-Merafe challenge to contain costs – Lion

Ferrochrome

60% 60%

0

20%

0%

10%

20%

30%

40%

50%

60%

70%

Conventional Outokumpu DC Arc Premus

Consum

ption/t

Comparative resources consumption gives Premus a further edge:

68

77

90

88

65

70

75

80

85

90

95

Conventional Outokumpu DC Arc Premus

% R

ecovery

Chrome Recovery Coke Consumption

24

Xstrata-Merafe challenge to contain costs

– Lion Ferrochrome (cont.)

4.5

4.0

3.5

3.0

2.5

2.0

MWh/tonne Alloy

Ore tonne/tonne Alloy

4.1

3.0

3.5

2.3

Conventional Bokamoso

4.1

3.0

3.5

2.3

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Bokamoso - improved energy consumptionXstrata-Merafe position in regard to the forecast high energy tariffs

Prospects

• China’s urbanisation plans to continue

• No new ferrochrome capacity expected from South Africa in the next

three years

• Ferrochrome prices expected to come under pressure in the short-term

but recover based on medium term fundamentals

• Strong cash flows being generated by Merafe are being used to:

reduce long term debt

strengthen working capital position

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www.meraferesources.co.za

Appendix

Merafe Coal

• Vehicle to pursue coal opportunities in South Africa

• 50/50 joint venture between Merafe and Sentula Mining Limited

• Prospecting of Schoongezicht and Bankfontein coal deposits is

underway

• These properties have a total target coal resources of approximately 10m tonnes

• Both projects are opencast and well positioned to supply export quality and Eskom quality coal

• Merafe Coal should be in a position to commence mining during the second half of 2009

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